Iskian v. Consolidated Gas Utilities Corp.

• Court: Oklahoma Supreme Court
• Writing for the Court: DAVISON
• Citation: Iskian v. Consolidated Gas Utilities Corp., 251 P.2d 1073, 207 Okla. 615 (Okla. 1952)
• Decision Date: 12 November 1952
• Docket Number: No. 35277,35277
• Parties: ISKIAN v. CONSOLIDATED GAS UTILITIES CORP. et al.

Page 1073

251 P.2d 1073

207 Okla. 615

ISKIAN v. CONSOLIDATED GAS UTILITIES CORP. et al.

No. 35277.

Supreme Court of Oklahoma.

Nov. 12, 1952.

As Amended Dec. 19, 1952.

Rehearing Denied Jan. 6, 1953.

Syllabus by the Court.

1. Question of interpreting royalty deed is one of intention of the parties, especially of grantors.

2. The intention of the parties must be deduced from the entire agreement, and every provision must be construed so as to be consistent with every other provision if possible, and that construction adopted which gives effect to every part of the contract.

3. An owner of a quarter section of land leased the same for oil and gas purposes by lease containing an entirety clause and then conveyed an undivided one-fourth interest in the one-eighth royalty in the oil and gas to be produced from the east one-half of said quarter section for the period of said lease; Held, that the royalty conveyance conveyed a 1/32 interest in all oil and gas produced from wells located on said east one-half of the quarter section unaffected by the provisions of the entirety clause in said lease.

Robinson, Shipp, Robertson & Barnes, T. Murray Robinson, Oklahoma City, for plaintiff in error.

Drennan & Eddy, Medford, George B. Collins and C. L. Williams, Wichita, Kan., Tom Biggers, Ponca City, Conrad C. Mount, Oklahoma City, and Dan Mitchell, Enid, for defendants in error.

DAVISON, Justice.

By this action, Bonnie W. Iskian, as plaintiff, seeks to recover 1/8 of the royalties payable for production of oil and gas from certain lands in Grant County, Oklahoma, in which the defendants contend she owns only 1/16 royalty interest. The parties will be referred to as they appeared in the trial court.

The defendants, Rufus Forsyth and Alice M. Forsyth, his wife, were the owners in fee of a quarter section (160 acres) of land in said county when, in 1924, they executed an oil and gas lease thereon, containing the following provision, which is commonly referred to as an 'entirety' clause, to wit:

'If the leased premises shall hereafter be owned in severalty or in separate tracts the premises, nevertheless, shall be developed and operated as one lease and all royalties accruing hereunder shall be treated as an entirety and shall be divided among and paid to such separate owners in the proportion that the acreage owned by each such separate owner bears to the entire leased acreage. There shall be no obligation on the part of the lessee to offset wells on separate tracts into which the land covered by this lease may be hereafter divided by sale, devise or otherwise or to furnish separate measuring or receiving tanks.'

The Marland Oil Company was the owner of said lease on July 24, 1928, when said lessors, the defendants Forsyth, executed the following conveyance:

'Conveyance of Oil and Gas Royalty

'This indenture made and entered into this 24th day of July 1928, by and between Rufus Forsyth and Alice M. Forsyth his wife as parties of the first part and Dickey Drilling Co., a corporation of Ponca City, Oklahoma, party of the second part:

'Witnesseth: that whereas parties of the first part are the owner of the following described real property situated in the County of Grant and State of Oklahoma, to-wit:

'The Northwest (NW 1/4) of Section Two (2) Township Twenty-seven (27) Range Three West (3W) Grant County, State of Oklahoma.

'And whereas, parties of the first part desire to sell, transfer and convey to the party of the second part, the interest and share hereinafter specified of the oil and gas in, under and to be produced from the above described premises, and party of the second part desires to purchase the same.

'Now, therefore, for and in consideration of the sum of One Dollar and other valuable consideration paid by the party of the second part to parties of the first part, the receipt of which is hereby acknowledged, said parties of the first part, for themselves, their heirs, and assigns do hereby sell, transfer and convey to the party of the second part, his heirs, and assigns, an equal undivided one fourth of one eighth interest and share in and to all of the oil and gas lying in and under and to be produced from the following described tract of land to-wit:

'On the East Half of the Northwest Quarter (East 1/2 N.W. 1/4) of Section two (2) Township Twenty-seven (27) Range Three West (3W)

'To have and to hold the same unto party of the second part, his heirs, successors, administrators and assigns. The rights herein granted shall be only for the period of lease now held by Marland from date of this conveyance, at the end of which time all rights herein under shall revert to the parties of the first part unless at that time oil and gas is produced and marketed in commercial quantities from said premises in which event the rights conveyed under this instrument shall continue to said party of the second part, until such time as production of both oil and gas in commercial quantities shall cease at which time all right hereunder shall cease and terminate as to party of the second part, and revert to parties of the first part. And this conveyance and transfer is a covenant running with the title to the land and is binding upon the first parties, their heirs, administrators, representatives, successors and assigns, and the first parties for themselves, their heirs, successors and assigns herewith represent and covenant with the said party of the second part that at the time of this conveyance they were the true and lawful owners of all the rights, title and interest in and to the interest herein conveyed and had good right and authority to sell and convey the same and that the right, title and interest herein conveyed are free and clear from all liens and incumbrances whatsoever and in the event of the failure or neglect to develop the above described tract for oil and gas at any time then the second party herein his agents, heirs, successors and assigns are herewith granted the right of ingress and egress in and to and upon said premises for the purpose of developing the same for oil and gas and they are herewith granted the right and privilege to do all things necessary and incident thereto and to charge the production produced from said tract with interest proportionate expenses thereto.

'In Witness Whereof we have hereunto set our hands and seal the day and year first above written.

'Rufus Forsyth,

'Alice M. Forsyth.'

Thereafter, a one-half interest in the estate owned by the above named Dickey Drilling Company was conveyed to one G. H. Wieland who, in turn, on February 12, 1929, conveyed the same to his then wife, Bonnie B. Wieland now Bonnie W. Iskian, the plaintiff herein. At the time this suit was filed, the defendants, Consolidated Gas Utilities Corporation and Continental Oil Company were the owners and operators of the above described leasehold estate and the defendant, Consolidated Gas Utilities Corporation, was the purchaser of the gas produced from the premises. The defendant, Globe Oil & Refining Co., was the purchaser of the oil produced from the premises prior to and until April, 1948. Stanley Forsyth, as administrator, has been substituted for the defendant Rufus Forsyth, now deceased.

In 1929, two wells, classified as gas wells, were drilled on the premises and their location, being on the east half of the quarter section or that part which was described in and covered by the above quoted 'conveyance of oil and gas royalty,' under which the plaintiff claims, gives rise to this litigation. From the time of the completion of said wells, until about July, 1943, plaintiff was paid royalty on the basis of 1/64 of the production (1/8 of 1/8) but from that latter date the royalty payments were withheld and impounded because of plaintiff's refusal to sign a division order under which she would receive 1/128 of the production (1/18 of 1/8), this being the amount to which the defendants contend she was entitled. Judgment of the trial court was for defendants, fixing plaintiff's royalty interest at 1/16 of the 1/8 royalty or 1/128 of the gross...